Organisations already seeing Apprenticeship Levy as an investment not a tax

New research from the Open University has found that 85% of organisations taking part believe the Apprenticeship Levy will have a positive effect on their business.

With an industry-wide focus on better training being driven by the UK Government’s Industrial Strategy, many English organisations are actively looking to use the levy to boost their workforce’s skills.

Just three months in, more than half of employers are making use of the levy and 25% are planning to.

However, the research also reveals that one in five don’t know how the levy works and recommends that, to realise the scheme’s full potential, more guidance is needed. 

Launched in April this year to increase investment in training, the Apprenticeship Levy costs an organisation 0.5% of its wage bill if that bill totals £3 million a year or more.

At that time, 28% said they were not fully informed about the levy, creating a mixed reaction amongst employers. The research shows that some of that uncertainty remains, with 2% reporting that they still don’t know anything about the levy at all.

Of those not currently using their levy ‘pot’, 29% say they do have plans in place, while 18% are at risk of missing out on higher level training as they have no plans to make use of the levy.

Conversely, 80% of senior managers say they have good knowledge of how the levy works and 87% believe it will benefit both UK productivity and the economy overall.

More than two thirds have been prompted by the levy to increase recruitment of higher apprentices and more than half have grown the number of degree apprentices, which will go some way to plugging the UK skills gap.

Meanwhile, 58% of senior managers plan to use levy funding to train existing employees in areas where skills are lacking, such as management and IT, building these skills from within, as opposed to bringing skills in from elsewhere. Approximately the same number plan to divert some of the funds to improve management or digital skills within their business.

This is in line with the most recent Open University Business Barometer which revealed that 43% of employers are struggling to find workers with adequate management skills, while 47% struggle to find staff with necessary IT skills.

90% of senior managers believe that the levy offers an opportunity for workers to reach their full potential and so offers real benefits to their organisation. That also translates into increased confidence, with 68% of business decision-makers feeling more positive about the initiative than at the time of its launch. 

Steve Hill, External Engagement Director at The Open University, says: “Understanding that improving skills and productivity can boost the bottom line is crucial to the success of the Apprenticeship Levy. Better training leads to more motivated and better skilled employees - who are engaged with and loyal to an organisation. By investing in training and development, the return on investment of the levy will be seen in more productive and efficient staff.”


Tuesday, 11 July 2017

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Organisations already seeing Apprenticeship Levy as an investment not a tax